Agenda item

The Chair introduced the item and advised that the action arising from Minute 110 would be considered under Item 11 on the agenda, Internal Audit – Progress Report 2025/26, and that the action arising from Minute 113 would be considered under Item 14, Training. The Chair further clarified that no further action was required in respect of Minute 124.

In relation to Minute 128, it was queried whether the ‘Fit for the Future’ proposals for the Local Government Pension Scheme required the appointment of an independent observer. It was noted that independent observers had been used to carry out periodic governance reviews to provide assurance but this had not been a statutory requirement. Under the new legislation, an independent governance review would be required every three years, and a suitable appointment would need to be made for this.

Regarding the appointment of an independent advisor, it was noted that the process would involve the development of a role specification and a decision on the recruitment approach. Members discussed the potentially limited pool of candidates and the challenges this could present, particularly given that consultancy firms undertaking the independent advisor role would be precluded from providing other services, such as actuarial or valuation work. It was further noted that the independent advisor would be required to be in post by 1 October 2026, and that all funds would be seeking to recruit from the same market. Concerns regarding the potential difficulty of recruiting to the role were noted, and Members discussed the risks, mitigations and consequences of not filling the position. Officers confirmed that, notwithstanding the proposed new requirements, the Fund currently had strong governance arrangements and access to appropriate advice, and therefore no significant risk was anticipated.

It was agreed that the action relating to Minute 128 could be removed from the table.

In addition to the above, Tom Morrison, Head of Investments, provided an update on the proposed expansion of the Border to Coast Pensions Partnership (BCPP). It was explained that agreement in principle had been given by the existing partner funds to expand from 1 April 2026 and that it was expected that the Partnership will expand to 18 funds, representing approximately £110 billion in assets and around 2 million members. Work is ongoing to update documentation, and discussions are taking place regarding the transition of the new funds.

Members were also advised that BCPP was expanding its capabilities as an investment pooling organisation, including the development of its capability to provide investment advice. Members queried the Government’s expectation that, from 1 April, investment advice would be provided by pools and that LGPS funds would not need to obtain advice from elsewhere. In response, it was explained that while pools are expected to provide advisory capability from that date, BCPP did not yet have a full advisory team and therefore some advisory capability would be available by April, but that it would take a few years for the function to be fully developed. It was noted that BCPP is likely to be further advanced than most other pooling arrangements.

Finally, Simon Purcell reported that he was now the regional representative for Unison.

Resolved

That the report and issues discussed are noted.